After looking at several of the market breadth charts in an attempt to see when the next oversold bounce is likely to arrive, it looks like we are in more of a neutral (sideways) type of environment. We don't have company insiders gobbling up company shares or a major short interest condition that might give us a kick start higher. Commodities have been getting hit rather hard of late so I thought there might be a sign on one of my trend charts ...... the Copper/Gold spread. The chart below shows the spread in the solid blue line and the SPX is in grey in the background. The lower box on the chart contains a long term indicator with a 30 period moving average. The Indicator has been very accurate over the last 6-7 years.
The spread is showing a small potential bottom and the indicator in the lower window is just ignoring it at the moment. Given currant conditions, only more rumors from Europe or the Fed are likely to move the markets significantly until we get past the Holidays. Any contrived rallies on low volume will be suspect and should be avoided by all but the short term traders.
Let's see what Santa brings next week.
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